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Finnair Cargo’s new hub terminal’s integrated data capabilities support a more planned approach to air freight handling, writes Will Waters

Europe’s newest and “most modern” air cargo terminal entered into commercial operation on 10 October, with Finnair Cargo’s ‘COOL Nordic Cargo Hub’ set to be in full operation by January 2018. The first phase has seen the Scandinavian carrier’s important seafood freight business handled in the ‘COOL Terminal’ – which, despite what its name suggests, will be the main cargo hub for all of the 400 tonnes of freight Finnair Cargo transports every day, not just the 100 tonnes per day of chilled, temperature-controlled, or other special cargo.

Although the carrier’s important perishables and pharma businesses will take up almost one quarter of the facility’s 30,000sqm footprint, it seems that the ‘COOL’ name is as much about its identity as a modern building that aims to bring air cargo into the digital age – and attract a different, young, or ‘cool’ type of employee to the business.

“There are many reasons why the name was selected,” Finnair Cargo MD Janne Tarvainen tells CAAS. “There are dedicated areas for temperate-controlled cargo, with 3,000sqm for pharmaceutical cargo and 3,500sqm for perishables (seafood) traffic. Secondly, COOL will be the most modern air cargo terminal in Europe once it is fully operational. It is not just a building, it is truly a processing centre for air cargo. There is a lot of cutting edge technology in the building and the level of automation and digital integration is high, assisting us to plan and guide the operations better.”

Tarvainen says the facility’s so-called ‘COOL Control Centre’ (CCC), built to monitor and control the carrier’s cargo operations networkwide, “utilises the best practices taken from Finnair’s passenger airline operations, which are one of the most reliable in the world”. He explains: “A lot of visualisation is used in COOL to share the status of operations. There are more than 100 info screens in the terminal, including the CCC’s large video wall, assisting CCC personnel to see the status of the operations easily and manage the operations by exception.”

But among the terminal’s other ‘cool’ properties, Tarvainen says, it is sustainability – boasting a BREAAM certification level of “very good”, thanks to “many energy-saving and environmentally friendly solutions and processes in the building, including 1,200 solar panels on the roof, providing roughly 10% of all the energy it requires”.

A350 capacity growth

The need for the new terminal was identified as a result of another modernization initiative within Finnair – the airline’s order for 19 new A350 aircraft. Eleven of these are already in service, supplementing the airline’s A330s, narrow-bodies, and all-cargo feeder services. “Even though the company was in cost-cutting mode, that (aircraft order) meant that our cargo payload capacity would grow by around 45-50% by 2020, and we knew also the cargo terminal was really jam-packed,” Tarvainen explains.

Finnair’s Asia-Europe-focused network has meant that the airline’s cargo business has a higher profile than within many passenger-dominated airlines, which has helped with cargo investment decisions such as over the new terminal. “In the past, legacy carriers’ cargo companies were their own silos, but that’s definitely not the case any more,” Tarvainen says. “We are in the mainstream of the company, and that has to do with the decision-making – also where we fly to, or what kind of an aircraft that we utilize with a given route. When talking about intercontinental flights or long-haul routes, at an average we bring 15-17% of the revenue of that flight. So, it is truly not a matter of choice whether we carry cargo or not.”

Ahead of the arrival of the first A350 in October 2015, “we decided to look things also little bit differently – not just filling more capacity, a larger warehouse – but is there anything else we could improve as an overall ecosystem?” The carrier brought in air cargo consultancy specialist Becon Projects and its MD, Uwe Beck, to help identify Finnair Cargo’s strengths, weaknesses, and competitive position now – and to design a cargo terminal that could best support its advantages and ambitions in the future.

The relationship between Finnair Cargo and Becon started in 2012, and Tarvainen says it has been “really a great example of partnership”. Beck says: “We did analysis of the existing terminal, came to the conclusion that it’s not feasible to expand or upgrade, and went into ‘greenfield’ planning”.

Tarvainen says: “There were some reality factors in place, obviously. We first needed to know where we stand, then to determine where you’re heading to, then to analyse and plan how you fill the gaps. We then started to describe and think about what does excellence look like; what do our customers truly want? And one question was: who do we want to be? We took Uwe into the project and started looking at what a world-class terminal should look like, and how it should be integrated into our world of working.”

Beck comments: “Everybody can build a building; it’s not a big issue, and also put in some technology that we all know. But I think we learned relatively quickly, together, that the IT integration would be the main issue, the main driver for improvements. And this subsequently was leading back also to restructuring the processes. I think this is the first clear message: look to your processes and reengineer them; see where the weak points and strong points are and where they need to adapt. I personally see many, many projects and facilities where they stick to processes from the last 10-15 years. That is not any more our world. You have to bring in the data; that’s what it is all about. And that’s why we developed this together.”

Best practice

Tarvainen says: “Also, what we did is to look at how we utilise best practices. You do not need to invent or innovate something completely new all the time. So, Finnair is one of the most reliable (passenger) airlines currently in punctuality and passenger connections, and has an excellent concept in managing our daily operations in our ‘operations control centre’ and ‘hub control centre’. And we decided to take this into our cargo world: our cargo control center, what we have in our COOL terminal, and which takes into account more than just the terminal.”

Other priorities were to look at the processes, the competence level of the people, training of the people and their way of work, “and a lot of unlearning as well of the old habits”. We tried to look at things with fresh eyes, question what should be done, and trying to look at the best features and best practice we should adopt. And that is probably something that will never end.

“So, instead of building a ‘terminal’ we actually ended up looking at the whole ecosystem. Our factory is not just the terminal: our factory is the Finnair network, where we operate – including our partners, including our stakeholders, ground handling companies, GSAs, and so on. That has to do with network control, how we manage our hub, and obviously some megatrends we are taking into account like automation.”

Current trends

Beck says designing a new terminal necessarily involves looking at trends in the industry, and “this was part of our discussions internally when we developed this whole project. We have a switch to higher-yield products: e-commerce, pharma, and perishables. And I think we all are very happy that cargo demand has picked up – maybe not the yield, but the volumes quite significantly.”

One challenge identified was the ability to handle peak volumes in the hub – particularly with the fast turnarounds the airline operates in Helsinki. Other key factors included “the demand by shippers, freight forwarders and the whole supply-chain to have accurate data and information and this will become more and more relevant”; the increased importance of widebody passenger aircraft such as A350s and B777s; digitalisation and IT taking a more important role in success in the future – “to steer and control all ‘shop floor’ activities”; and tracking of shipment status information such as temperature. “I think this is what we need to talk about and achieve in the next 10 to 15 years,” says Beck.

Design priorities

Some key performance issues identified as design priorities for the new terminal included the need for a flexible, modular design; accommodating the 80% of traffic that is transhipment freight; the need for a high level of IT automation due to high labour costs and the need for high handling quality; the fast transport of shipments inside the terminal; dedicated areas for pharma, fish, and perishables products; and digitalisation steering all of the operational activities.

Beck says his company’s principles for modern terminal planning insist that “form follows function”, which means “never let architects take the lead in any project. Think about the processes, what you want to achieve, and plan and build the frame around those processes.”

The partnership between Finnair Cargo and Becon continued after the design stage to steering the project, including putting in place good contracts with all the suppliers, and “project management from a technical point of view” until the first phase went live on 10 October and up until the facility goes fully live in early January. “I think this was also very well done with all the stakeholders involved and led us to where we are now,” says Beck.

Processing centre

While he still sometimes calls the facility a “warehouse”, Beck stresses: “It’s not a warehouse anymore, it is a processing centre. We are not developing warehouses at an airport with airside access; this needs to be changed in the mindset of all in our industry. Storing and warehousing at an airport is the most costly thing you can ever do. We want to process cargo in and out as quickly as possible, and this I think is also a message to the airlines, the truckers, to adjust to not using the facility anymore for storage, especially over the weekend. We know that there are sometimes trucking restrictions. But at the end of the day, it is a processing centre; just-in-time is what this is all about.”

Tarvainen says the building is now “one of the fundamental building blocks” for Finnair Cargo, “created taking into account the whole ecosystem involved. There’s quite a bit of intelligence in the building as well, cutting-edge technology. The depth of the data integrations have been taken to the next level, of what I’ve seen so far, assisting us also to conduct our operations in a little bit of a different way. One of our core competitive edges is Helsinki’s location, but taking advantage of that requires us to have excellent quality, speed, and accuracy and a very transparent way of working – and that building is assisting us on that.”

Production planning

Beck says that the operational aspects of the facility’s IT system have been designed to introduce and support a different approach and a relatively new way of thinking within air cargo handling that involves a far more proactive and planned approach. This starts from production planning. “What does it mean? Planning actively via IT your workstation processes so that people know what they need to do each minute of the process,” he says.

As well as production planning, operational aspects automated and supported by the terminal’s IT capabilities include: forklift management; shipment control; landside yard management; airside interfacing; automated X-ray processes; live operational dashboards (LOD); and the Cargo Control Centre (CCC).

Work plans and orders are distributed digitally, meaning forklift drivers get the instructions directly on their tablets, for example. Beck adds: “Shipment control means we know where our shipment is inside the warehouse at any time; there is complete landside yard management, and airside interfacing to inform the dolly traffic airside in and out of the terminal; we have integrated x-ray processes; and I think the game changer is the live operational dashboards and the Cargo Control Centre. It looks a little like the Starship Enterprise and I think it is unique in our industry.”

Investment in people

One other key factor has been the investment in people. “We put a lot of effort into training, and to dry-run processes; we have had over 4,000 test runs,” notes Beck. Like many major projects, the journey to full live operation has taken “a bit longer than originally expected”, but the huge number of test runs were essential, both say.

The level of digital sophistication has also helped to attract a new “youthful, energetic, and enthusiastic” group of staff – something that air freight has struggled to achieve in the past but which is likely to prove increasingly important in the new digital age. “I think this will be a key changer,” says Beck.

Tarvainen adds: “That is one of the great parts of the story. We have been able to attract young, talented people. Even though you have digitalised processes in place, it’s all about the people. It’s really great to have those young people on board.”

Alongside the CEIV-certified 3,000sqm for pharmaceutical cargo and 3,500sqm for seafood traffic, the 30,000sqm facility has a handling area with more than 500 storage positions for ULDs and a fast-processing automated sending and retrieval system (AS/RS system) with 2,000 storage locations.

“We can turn around the whole storage warehouse within three hours, if necessary,” says Beck, providing the capability to cope with Finnair Cargo’s high transhipment demand.

He says those elements are all relatively standard technology, these days. “There’s nothing particularly new, but the new element is the IT. This is a game changer in this thing.”

The system includes two Rapiscan x-ray machines that are integrated into the process, which means unscreened units can be screened within the automated system – which uses 1.7 x 1.7m plastic pallets that can take a weight of up to 2 tonnes and 1.7m high. Eleven picker cranes generates fast movements and, at peak capacity, 500 shipments per hour can move in and out in the system. Total annual capacity is 350,000 tonnes.

All of this is managed and monitored from the Cargo Control Centre, where network supervisors, documentation people, workstation planners, and the process owners for the landside and the airside sit and “share the same information, talk about the proper solution (for exceptions), and go into the solution process”. Video cameras feed live images of the entire operation, including progress on build and breakdown on each individual workstation, while another screen has a live ‘Flightradar’ feed of all Finnair flights.

“There is so much data available that you need to present it in a way that leads by exceptions,” says Tarvainen. But the reliance on data increases the need for the data to be of good quality, still regrettably a rare thing in air cargo. “When we launched our cargo management system last December, 50% of the data was wrong,” he says. “Now we do quite a bit ourselves to rectify the data and we have good data in our system. We can steer our operations well and it’s really a huge asset.”

Items on the agenda for next year include introducing an automated robot for loading boxes of fish products into ULDs, “because it’s an ideal package, it’s an ideal. And I think if we have that first experience, we can also put it to other commodities.”

Other planned improvements include: automated guided vehicles (AGVs) at landside acceptance; integration of ramp operations into data exchange; more dashboard functionality for operations; cloud-based services; enhanced temperature monitoring; and improved digital tools.

Lessons learned

Asked what lessons have been learned, one thing Tarvainen had underestimated was the level of staff resource that the project would require, which meant the carrier ended up freezing some other projects “in order to get that capacity and resources to fulfill that most important task”.

He says doing the “huge amount of tests” was also essential, “with the knowledge of the cargo management system” – which had been introduced the previous year. “And the other thing is that we committed to train the personnel with the functioning system.”

But he says the biggest lesson was the importance of quality data. “That’s really essential to our business and a modern production or cargo management system: they require high process discipline, but they also require good data discipline. During the test runs, we also learned a lot when we were first operating real data, real simulated cargo and simulated real flights and we did quite a lot of enhancements in the functionality of certain areas – for example to make it easier for the (operations) people. They came back saying it was great, but maybe with this information we can do it better. And then we had discussions and made some upgrades in the software, and this process has made it even better before we fully opened it.”

On making improvements to the data quality, Tarvainen says: “Unfortunately, we are not able to control how shippers and other stakeholders behave, but we’ve been working with upstream data quality, and on top of that we do also have a dedicated team to rectify the bad data. That’s a bit frustrating that you need that, but in order to have a good data you should do it.”

He concludes: “I think this is also a message to our industry. All stakeholders should push those who are not performing so well to do it better – either in the contracts or whatever, but this is an elementary thing for the future. I believe that disruption will come in to our industry, and that area is part of the disruption. The way of working will change, if you want it or not. But it has to do with the data.”